Retailer Tips October 1999

February 29, 2000

Let the competition begin.

As the popularity of skateboarding continues to grow, and the sport receives more mainstream coverage, so will the competition to sell skateboards and skateboard-related products. Shops spring up within blocks of one another, and companies are forced to decide who to sell to. This struggle to control brands can cause not only conflict between competing shops, but between shops and their suppliers as well.

The majority of these conflicts arise from fear and poor (or too little) communication. Here is a look at how and why your new competition may be selling the same product as you, and how you can deal with this competition and make it a positive thing for your shop and your local skate community.

Generally speaking, there will be less competition with smaller newer brands than with bigger more established brands, and less generally with softgoods than with hardgoods. New skateboard brands will try to build their business with your business. The demand for their products can usually be satisfied with just one shop in any one particular area, and in exchange for selling and building a demand for their products, they will protect you by not selling to your competition.

For Chris Hensley of Innes Clothing, the size of his company enables him to only rarely have problems with shops directly competing with the brand. “As a growing company, the demand for our product is not so big that we need to open competing shops to satisfy the demand in an area. Right now we are able to grow our brand with each individual shop on an individual basis.”

It’s much the same for Andy Kessler, co-owner of New York’s Wounded Knee skateboards: “Being that we are a new board company, we are trying to open up anyone where our decks can fulfill a niche. This tends to be your hardcore shops, or shops located near skateparks. Our accounts are mostly on the East Coast and in places like New York, where there are a lot of shops. Everyone tends to carry the same stuff anyway.”

The more established skateboard companies generally have larger promotional obligations and operating expenses than their smaller newer counterparts. Because of this, these brands need high sales volumes and broader distribution, often meaning chain stores as well as smaller retailers. This can, and usually does, cause conflicts among competing stores. At Tum Yeto, owner Tod Swank says it seems to be a constant problem, and that he really doesn’t like dictating who gets what: “The reality is that the ‘core stores alone could not support our business. The chain stores do more volume and they pay their bills on time. A shop may complain that it’s a lack of loyalty on our part, but I can’t have sympathy if they’re selling blank decks next to ours or any other brand-name deck.”

It’s often futile for retailers to complain to suppliers about your competitor carrying some of the same products that you carry. While you may deal directly with companies, your competitors might be getting those products through an independent distributor. When companies sell to distributors, they have little or no control over who the distributors then sell to. If you’re dealing directly with companies, you have an advantage over your competitors. They probably don’t have the same demand as you do for the product, and must order multiple brands from a distributor in order to meet their needs. Dealing directly with companies, you’ll more than likely be getting new product the quickest, and you’re more apt to get promotional items for events and tour stops for demos.

Softgoods are generally not sold through distributors, so their distribution is more easily controlled. In addition, these products are often sold through outside reps who are in tune with an area’s particular demand. Steve Machado, national sales manager for Globe shoes, says, “Our outside reps are very knowledgeable on the particulars of distribution in their territories. We want them to be responsible r which shops carry our line, and what product each shop carries.”

Companies must take into account many different factors before deciding to expand their distribution in a particular area. One consideration is proximity to existing accounts. In populated areas where there are many different stores selling skateboard products, a ten-mile rule may apply. This means that your supplier will not open an account within a ten-mile radius of your store. Shop guru Scott Oreschnick at Cal Surf in Minneapolis, Minnesota, says, “The distance rule works in the case of small new stores opening up, because they must fill out dealer applications, that disclose the store’s location. What worries me, and seems to fall through the cracks, are the bigger chain stores that do not have to disclose the location of a new store. The skateboard supplier often does not know that his product is being sold across the street from a store that has been selling his product for years.”

Growth in sales is another key factor. If your shop is consistently growing a brand and is increasing its volume annually, the company may be more inclined to protect you by not selling to anyone else in the area. As the cycles of the top brands continue, the sales for a particular product will eventually begin to slow in your store, and another brand will begin to take its place. When this starts, suppliers may need to open another shop in the area to increase the brand’s visibility and grow demand. This may not be detrimental to your business; your store has already ridden the initial wave of success for that particular brand, and when someone else starts selling it, you could see sales rejuvenate.

Don Brown, owner of Sole Technology, comments, “We definitely look to protect our longest supporters, but at the same time we need to look for continued growth of our brands, and how well the brands are promoted by a shop displaying P.O.P. and carrying a variety of SKUs.”

It’s reasonable to be apprehensive about new competitors selling the same product as you. Many new retailers will try to attract your customers with lower prices. This can be disastrous if you let your store get sucked into a price war; in order to stay in business, you need to protect your margins. Customer service is what wins loyal and consistent customers, and ensures a stable business. In Charleston, South Carolina, King Street Skates Owner Kenny Griffin says, “My business is so strong, I’m not worried about new competition. What I am worried about is when they get opened up, and then fail. Then they are forced to blow out inventory at or below wholesale. People will stock up on product, and it tarnishes the brand name, which will eventually have a negative effect on my business.”

The best protection from unwanted competition is to work closely with your sales reps. Companies rely on their reps for proper placement of their brand, and good outside reps will have some pull with the company when there is pressure to expand distribution. If your relationship is strong with your reps, and you’ve been consistently building the brand, chances are it will help you to protect your position with the company.

There will be times when it may be out of the reps’ hands and they have to open someone in your area, but a strong relationship can still work to your advantage. Bobby Patillo, manager at C&C Ride Shop in Riverside, California says, “We had a case where a rep needed to open another shop in our area after a few seasons, and he discussed it with us beforehand. Because we helped build the demand for the product, he wanted to find out which shop would have less of an impact on our location. Working with him, and eventually the other shop, we still have strong sales with that brand.”

Sometimes the worry over competing stores carrying the same product is blown out of proportion. The skate market is once again on the upswing, everybody is selling a lot of product, and a good skate shop will build its own niche with lines that fit its customers. Many times two shops selling the same branded product will attract different clientele, and often they won’t be selling identical items: one shop may cater to an older, more hardcore type of customer, while the other shop might deal mostly with a younger, family-oriented crowd. Each can build its image with the same staple brands and diversify within the brands to attract its particular patrons.

Get to know your competition and the lines and products they sell. If a customer is looking for a certain size and style of shoe that you don’t have, be willing to call another local shop and check availability. While they may buy from your competitor today, feel confident that your helpful service will have those customers coming back to you for future purchases. When shops begin to refer customers back and forth, everyone wins. The easiest way to eliminate a competitor is to make him an ally.

Competition should bring out the best in us, not the worst. Bickering, complaining, and worrying will not help your business to prosper. Competition forces us to be better at the things we do: board companies make better decks, shoe companies make better shoes, and stores that choose to service the skateboard consumer will have to provide better service.

Competition will force you to know your target market, which in turn will make you a better buyer. You will have to improve every aspect of your business in order to stay ahead of your competitors. At Avalanche Snow & Skate in El Cajon, California, owner Tom Aland sums it up: “A good shop doesn’t need to worry about someone else carrying the same brands, because a good shop is the one starting the trends and providing the best service.”

So don’t let a little competition scare you. Work closely with your sales reps to build strong partnerships. Know your target market and build your own niche in your skate community. If you provide the best customer service possible, you won’t have any real competition. Lastly, know your competitors, and work with them to help strengthen your skate scene.

As the skate market continues to grow, so will competition in the marketplace. If you’re ready for it, you’ll welcome the challenge and rest assured that yours is the best shop in town.ts own niche with lines that fit its customers. Many times two shops selling the same branded product will attract different clientele, and often they won’t be selling identical items: one shop may cater to an older, more hardcore type of customer, while the other shop might deal mostly with a younger, family-oriented crowd. Each can build its image with the same staple brands and diversify within the brands to attract its particular patrons.

Get to know your competition and the lines and products they sell. If a customer is looking for a certain size and style of shoe that you don’t have, be willing to call another local shop and check availability. While they may buy from your competitor today, feel confident that your helpful service will have those customers coming back to you for future purchases. When shops begin to refer customers back and forth, everyone wins. The easiest way to eliminate a competitor is to make him an ally.

Competition should bring out the best in us, not the worst. Bickering, complaining, and worrying will not help your business to prosper. Competition forces us to be better at the things we do: board companies make better decks, shoe companies make better shoes, and stores that choose to service the skateboard consumer will have to provide better service.

Competition will force you to know your target market, which in turn will make you a better buyer. You will have to improve every aspect of your business in order to stay ahead of your competitors. At Avalanche Snow & Skate in El Cajon, California, owner Tom Aland sums it up: “A good shop doesn’t need to worry about someone else carrying the same brands, because a good shop is the one starting the trends and providing the best service.”

So don’t let a little competition scare you. Work closely with your sales reps to build strong partnerships. Know your target market and build your own niche in your skate community. If you provide the best customer service possible, you won’t have any real competition. Lastly, know your competitors, and work with them to help strengthen your skate scene.

As the skate market continues to grow, so will competition in the marketplace. If you’re ready for it, you’ll welcome the challenge and rest assured that yours is the best shop in town.